Monday, May 9, 2016

Contractor Pays $2.1 million to Settle Shipping Over-Charges

The U.S. Government contracted with a British company to provide blast walls (also known as Concertainer Units). The blast walls, produced in England were to be shipped to s U.S. Military base in Germany.

According to the terms of the contract, the price to ship a truckload of Concertainer Units from England to Germany would be based on actual costs not exceed $930 per truckload.

For ten years, from 2002 to 2011, the contractor transported the Concertainer Units using a third-party transportation subcontractor, charging the Government the not-to-exceed price of $930 per truckload. However, an investigation revealed that the contractor had paid less than that amount for each truckload, a fact that violated the terms of the contract, according to the Government.

When questioned about the shipping charges in 2009, the contractor "knowingly provided the Government false information concerning the amount that it had actually paid to the transportation subcontractor. The contractor submitted 47 false invoices that were made to appear to be authentic invoices from the subcontractor (Do you understand why contract auditors often insist on viewing original invoices and not copies?). The contractor also engaged in a kickback schemem by which it received "credits" from its transportation subcontractor.

When challenged, the contractor made things much worse by falsifying documentation. As a result, the Government contended that the contractor was in violation of the False Claims Act. Ultimately, the contractor agreed to pay $2.1 million to resolve the allegations (without admitting guilt).

You can read the entire DOJ press release here.

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